2 First-Time Home Buyer Mistakes To Avoid And How To Avoid Them

Investing in real estate can be an overwhelming process, but buying your first home can affect you physically, emotionally, and financially. From the long packing and relocation process to the whirlwind of emotions that accompany buying real estate, it is easy to see the challenges of buying your first home. If you are part of the 33 percent of first-time buyers shopping for their first home, use this guide of common mistakes to make your purchase a successful one.

Buying More Than you Can Afford

Unless you have the cash, you will most likely need a mortgage to purchase your first home. Banks will utilize your credit report and a statement of assets to determine the amount of home you can afford. However, mortgage companies will not take hidden financial obligations into consideration.

To determine how much house you really can afford, make a list of all of your bills and expenses. Be sure to include the following, if they apply to you:

• Auto Loans
• Recreational Vehicle Loan
• Student Loans
• Utilities
• Child Support/Spousal Support Payments
• Health Insurance/Medical Expenses
• Auto/Life Insurance
• Groceries
• Transportation Costs – Gas, Maintenance, Taxes
• Retirement Account
• Vacation Savings

You should also include potential costs associated with the purchase of your first home. Homeowner's insurance, taxes, and homeowner's association fees should all be accounted for in your budget.

Since many of these expenses occur periodically through the year, you and your mortgage company may not place enough emphasis on them.

Having your bills and expenses written out or added to a spreadsheet will give you a more clear understanding on how much house you can realistically afford to purchase.

Skipping the Inspection

After finding the house you can afford to purchase, you may feel overly excited to close on the deal. This excitement leads to many buyers foregoing an inspection of the home. In addition to the excitement of closing on the home, many first time buyers prefer to save the $300 to $400 cost of hiring an inspector. Unfortunately, this savings can lead to enormous financial issues in the future.

Hiring a home inspector is smart to ensure that your potential first home does not have outdated electrical wiring, which can lead to dangerous fires and costly repairs. A home inspector will also locate any possible plumbing problems that can lead to severe water damage and mold growth. An inspection can also save you from replacing HVAC equipment, roofing shingles, or septic systems, since licensed inspectors have the trained eye necessary to locate these severe underlying issues.

To reduce your risk of purchasing a money pit, make sure to invest the money and hire the home inspector.

Purchasing your first home can be a fun experience, but taking the proper precaution is key to success. With this guide, you can avoid costly, stressful, and overwhelming mistakes when purchasing your first home.